Global Market Cap Distribution vs GDP Growth

Dear Reader,

After being diagnosed with acute diverticulitis I'm now on antibiotics and a fiber-low regime. It must be a perfect match with the hottest August day ever measured in Belgium, the Gods are benevolent on me.

Anyway, in the never-ending stream of real-news and not-so-real-news my eye was struck today by a Voronoi post from Visual Capitalist titled "The UK Was Once the World's Largest Stock Market". It is certainly an amazing visualisation.

We see the picture of 1900 compared with today (2023). To fully understand the beauty of this work you should best combine the visualisation with a data set from Our World in Data on the evolution of GDP. How a series of (long term) data combined from different sources (Global market cap and Global GDP) can translate so nicely into a festivity of insights! ??

First of all one may notice that the global GDP grew from a 4.2$T in 1900 to some $140T in 2023. That is a factor 33 or equivalent to a CAGR of 2.34%. Note that according to author, the data are adjusted for inflation, so this is (should be) real growth.

Out of curiosity I also checked the program in the period from 1500 to today when the world was growing from a mere $500B to today's $140T. The CAGR then results in a mere 0.80%.

What else can we see?

Well, ...

• Since 1900, the United States has grown its share of global market capitalization by 46% !!
• Asian countries like Japan, China, and India have also emerged as major equity markets and Japan is doing remarkably well as the second largest one with 6.2%, no wonder that Warren Buffett has bought into Japan as a diversification..! China has the size (2.8%) of France now.
• The United Kingdom (former Commonwealth) decayed from a world leadership (24%) into oblivion nowadays, but is still some 50% larger than France (2.8%) or Germany (2.1%), and Switzerland (2.4%) has done better than Germany by attracting many wealthy individuals
• Australia remarkably went from 5% to 2% meaning that as a continent it didn't do very well
• The rest of the world is simply 'not meaningful' and went from 12.x% (1/8th) to 10% (1/10th)

I wonder how the map will look like in 2050.

Cheers as always,

Luc